JH C.S.H.B. 3531 75(R)    BILL ANALYSIS


URBAN AFFAIRS
C.S.H.B. 3531
By: Ehrhardt
5-5-97
Committee Report (Substituted)



BACKGROUND 

The Texas Capital Trust Fund was established as a repository of 
proceeds from the sale of certain 
state lands and real assets.  Use of the fund has been restricted 
to certain state agencies for 
acquisition and improvement of facilities subject to 
appropriation for that use by the Legislature. 
The fund is held held in the State Treasury and income from the 
fund is assigned to the General 
Revenue Fund.  Fund balances in excess of $500,000,000 are 
targeted for biennial sweeps into 
the General Revenue Fund.  (This has never occurred and such a 
balance is not in any 
projection.)

One state agency (The Texas Department of Mental Health and 
Mental Retardation) presently 
utilizes the capacity of this funding mechanism for active 
facility improvement by aggressively 
pursuing real property sale and lease.  Most revenue projected 
for this fund during the next few 
years will result from a new law which encourages effective asset 
management of the state's real 
property.

The Texas Housing Trust Fund is established "to provide loans, 
grants, or other comparable 
forms of assistance to local units of government, public housing 
authorities, nonprofit 
organizations, and income-eligible individuals, families, and 
households to finance, acquire, 
rehabilitate, and develop decent, safe and sanitary housing."  
Presently this is the only direct state 
contribution made available to Texans in the pursuit of adequate, 
affordable housing.  Recent 
study indicates that the need for such funding is critical and 
that the balance of the fund is 
inadequate to this need.  

PURPOSE

This substitute for HB 3531 would permit state agencies to 
continue aggressive asset 
management and permit continued use of the proceeds from the sale 
or lease of real property for 
facility acquisition, construction and improvement as 
appropriated by the legislature.  Funds 
which result from the asset management program of Texas 
Department of Mental Health and 
Mental Retardation (MHMR) and are not appropriated to that agency 
by the legislature will be 
dedicated to programs for the housing of persons with mental 
illnesses or mental retardation.

Income from the fund would continue to flow to the General 
Revenue Fund.  No provision would 
remain to "sweep" to the benefit of the General Revenue Fund.  
Annual transfers would be made 
by the Comptroller of Public Accounts of all unencumbered and 
unappropriated funds, to the 
benefit of the Texas Housing Trust Fund.  

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly 
grant any additional rulemaking 
authority to a state officer, department, agency or institution.

SECTION BY SECTION ANALYSIS

SECTION 1.Allows capital trust fund to be transferred to housing 
trust fund.

SECTION 2. Requires comptroller to annually transfer 
unappropriated or unencumbered 
  balances in capital trust fund to housing trust fund.  Repeals 
current law provision 
  requiring balance in excess of $500 million to be transferred to 
general revenue 
  fund.  

SECTION 3. Requires portion of housing trust fund derived from 
TDMHMR activities to be 
  used for housing programs for persons with mental illness or 
retardation. 

SECTION 4. Effective date of September 1, 1997.

SECTION 5. Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute retains current law regarding use of capital trust 
fund and allows transfer to 
housing trust fund.  The substitute deletes current law provision 
regarding transfer of fund 
balance in excess of $500 million to general revenue fund.  The 
substitute deletes proposal in the 
original to make quarterly transfers.  The substitute adds 
Section 3 of the bill.